What are the tax implications of a business registered as a subchapter S corporation versus an LLC?

Video Transcript

With the sub-chapter S corporation, all income from the company passes through the shareholders. The shareholders report all items of income, deduction and credit. With an LLC, there’s a lot more flexibility. A single member LLC can be a disregarded entity for federal income tax purposes. In addition, if it’s a multi-member LLC, it can be taxed as a partnership for federal income tax purposes or can elect to be taxed as a C corporation or an S corporation, so the flexibility is much better with a limited liability company or LLC